UNIVERSITI PUTRA MALAYSIA THE PROPENSITY TO LEAVE THE ORGANIZATION AMONG THE STAFF OF HOTEL INDUSTRY IN KUALA LUMPUR LIM LAI CHOON FPP

Transcription

1 UNIVERSITI PUTRA MALAYSIA THE PROPENSITY TO LEAVE THE ORGANIZATION AMONG THE STAFF OF HOTEL INDUSTRY IN KUALA LUMPUR LIM LAI CHOON FPP

2 THE PROPENSITY TO LEAVE THE ORGANIZATION AMONG THE STAFF OF HOTEL INDUSTRY IN KUALA LUMPUR By LIM LAI CHOON Thesis Submitted to the School of Graduate Studies, Universiti Putra Malaysia, in Partial Fulfilment of Requirements for the Degree of Master of Science October 2002

3 Abstract of thesis presented to the Senate ofuniversiti Putra Malaysia in partial fulfilment of the requirement for the Degree of Master of Science THE PROPENSITY TO LEAVE THE ORGANIZATION AMONG THE STAFF OF HOTEL INDUSTRY IN KUALA LUMPUR By LIM LAI CHOON October 2002 Chairperson: Professor Dr. Aminah Ahmad Faculty: Educational Studies Competence workers play a major role in boosting the hotel industries. However, high staff turnover tends to inhibit their growth. Therefore it is rather important that the managers identify and understand the factors related to the propensity to leave. The general objective of the study is to examine the predictors of hotel staff propensity to leave; and the mediating role of job satisfaction and organizational commitment. Specifically it aims to examine the relationship of research variables; and whether job satisfaction and organizational commitment mediate the effect of independent variables on the dependent variable. The study was conducted in the selected hotels in Kuala Lumpur by using a questionnaire. A total of 238 valid responses were obtained. II

4 Frequencies, descriptive, regression analysis, correlation and path analysis were used to analyze the data There are two parts in the findings, the relationship of study variables and the role mediating variables In the first part, findings show that self-esteem, emotional intelligence, role conflict, role ambiguity, work overload, perceived empowerment, perceived career advancement and perceived leader -staff relationship are significantly related to job satisfaction All these variables are also found to be significantly related to propensity to leave and organizational commitment except for emotional intelligence Job satisfaction and organizational commitment are also related to propensity to leave In the second part, findings show that job satisfaction mediates the effect of emotional intelligence, role ambiguity, work overload, perceived empowerment and perceived leader-staff relationship on propensity to leave Organizational commitment mediates the effect of self-esteem, role conflict, role ambiguity, work overload, perceived empowerment, perceived career advancement and perceived leader-staff relationship on propensity to leave Recommendations are suggested to mitigate or alleviate staff turnover They include staff recruitment, training, more conducive and inspiring 111

5 workplace, greater empowerment and lastly less role conflict, role ambiguity and work overload. IV

6 Abstrak tesis yang dikemukakan kepada Senat Universiti Putra Malaysia sebagai memenuhi sebahagian keperluan untuk ijazah Master Sains KECENDERUNGAN BERHENTI KERJA DI KALANGAN PEKERJA INDUSTRY PERHOTELAN DI KUALA LUMPUR Oleh LIM LAI CHOON Oktober 2002 Pengerusi: Profesor Dr. Aminah Ahmad Fakulti: Pengajian Pendidikan Keupayaan pekerja memainkan peranan penting dalam perkembangan industri perhotelan. Namun, kecenderungan berhenti kerja yang tinggi di kalangan pekerja telah membantutkan pertumbuhan industri ini. Justeru itu, adalah penting bagi pengurus mengenalpasti dan memahami faktor-faktor yang berkaitan dengan kecenderungan berhenti kerja ini. Objektif umum kajian adalah untuk mengenalpasti pembolehubahpembolehubah yang menjangka kecenderungan berhenti kerja di kalangan pekerja-pekerja hotel serta peranan pembolehubah kepuasan kerja dan komitmen organisasi sebagai mediator. Secara khususnya, kajian ini bertujuan untuk mengenalpasti hubungan kaitan antara pembolehubah-pembolehubah kajian; serta mengenalpasti sarna ada kepuasan keija dan komitmen organisasi dapat memain peranan mediator dalam hubungan antara pembolehubahpembolehubah bebas dengan pembolehubah terikat. v

7 Kajian ini melibatkan hotel-hotel yang terpilih di Kuala Lumpur. Soal-selidik yang sah telah digunakan Sejumlah 238 respons yang lengkap telah diperolehi. Analisis frekuensi, diskriptif, regresi, korelasi dan analisis arahaliran telah digunakan dalam penganalisisan data Terdapat dua bahagian dalam penemuan iaitu hubungan perkaitan antara pembolehubah-pembolehubah kajian dan peranan pembolehubahpembolehubah mediator. Di bahagian pertama, hasil kajian menunjukkan kebolehan kendiri, kepintaran emosi, konflik kerja, ketidakjelasan kerja, beban kerja, persepsi autonomi, persepsi prospek kerjaya dan persepsi hubungan majikan-pekerja mempunyai perkaitan yang signifikan dengan kepuasan kerja. Pembolehubah-pembolehubah tersebut juga didapati mempunyai perkaitan yang signifikan dengan kecenderungan berhenti kerja dan komitmen organisasi kecuali kepintaran emosi Kepuasan kerja dan komitmen organisasi juga mempunyai kaitan yang signifikan dengan kecenderungan berhenti kerja. Di bahagian kedua, hasil kajian menunjukkan bahawa kepuasan kerja mengesani pengaruh kepintaran emosi, ketidakjelasan kerja, beban kerja, persepsi autonomi dan persepsi hubungan majikan-pekerja terhadap kecenderungan berhenti kerja. Komitmen organisasi mengesani pengaruh kebolehan kendiri, konflik kerja, ketidakjelasan kerja, beban kerja, persepsi autonomi, persepsi prospek kerjaya dan persepsi hubungan majikan-pekerja terhadap kecenderungan berhenti kerja VI

8 Cadangan yang diperkenalkan untuk menyelesaikan atau meminimumkan masalah kecenderungan berhenti kerja ini termasuk pengambilan staf, pengendalian latihan, peningkatan suasana kerja yang kondusif dan menyeronokkan, peningkatan autonomi dan akhirnya pengurangan konflik kerja, ketidakjelasan kerja dan beban kerja VB

9 ACKNOWLEDGEMENTS First and foremost, I wish to extend my gratitude to my chairperson of the supervisory committee, Professor Dr Aminah Ahmad for her guidance and all the help she has given me Without her help I would not have completed this thesis successfully I also wish to extend my thanks to Associate Professor Dr Saidin Teh and Associate Professor Dr Bahaman Abu Samah, my supervisory committee, for rendering their precious time and guidance My gratitude also goes to Dr Serin Singh, lecturer from University Malaya for editing this thesis Also not forgetting all other lecturers and friends that have guided me in the process of pursuing my master's course Special thanks also go to all the management of the hotels for allowing me to conduct the survey in their premises I also wish to thank the participants who gave their utmost support and co-operation, to enable the survey to be carried out successfully To my family, you are and will always be my pillars of support Without you, I would not be what I am today I thank you from the bottom of my heart Vlll

10 I certify that an Examination Committee met on 1 st October, 2002 to conduct the final examination of Lim Lai Choon on her Master of Science thesis entitled "The Propensity to Leave the Organization among the Staff of Hotel Industry in Kuala Lumpur" in accordance with Universiti Pertanian Malaysia (Higher Degree) Act 1980 and Universiti Pertanian Malaysia (Higher Degree) Regulation 1981 The Committee recommends that the candidate be awarded the relevant degree. Members of the Examination Committee are as follows ABD. RAHIM BAKAR, Ph.D. Associate Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia (Chairman) AMINAH AHMAD, Ph.D. Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia (Member) SAIDIN TEH, Ph.D. Associate Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia (Member) BAHAMAN ABU SAMAR, Ph.D. Associate Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia (Member) MSHERMOHAMAD RAMADILI, Ph.D. ProfessorlDeputy Dean School of Graduate Studies Universiti Putra Malaysia Date 2 7 DEC 2002 IX

11 This thesis submitted to the Senate of Universiti Putra Malaysia has been accepted as partial fulfilment of the requirement for the degree of Master of Science. The members of the Supervisory Committee are as follows: AMINAH AHMAD, Ph.D. Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia ( Chairperson) SAIDIN TEH, Ph.D. Associate Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia (Member) BAHAMAN ABU SAMAH, Ph.D. Associate Professor Department of Professional Development and Continuing Education Faculty of Educational Studies Universiti Putra Malaysia. (Member) AINI IDERIS, Ph.D. ProfessorlDean School of Graduate Studies, Universiti Putra Malaysia. Date: 1 3 FEB 2U03 x

12 DECLARA TION I hereby declare that the thesis is based on my original work except for quotations and citations, which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other degree at UPM or other institutions. LIM LA! CHOON Date: / OCTO,(3G xi

13 TABLE OF CONTENTS Page ABSTRACT 11 ABSTRAK v ACKNOWLEDGEMENTS Vlll APPROV AL SHEETS IX DECLARATION FORM Xl LIST OF TABLES XVll LIST OF FIGURES XIX CHAPTER I INTRODUCTION 1 Background of Study 2 Problem Statement 7 Objectives of the Study 12 Hypotheses 13 Significance of the Study 15 Scope of Study 16 Limitations of the Study 17 Definition of Terms 18 II LITERATURE REVIEW 19 Introduction 19 Definitions and Concepts 19 Propensity to Leave 19 Job Satisfaction 21 Organizational Commitment 22 Self-esteem 23 Emotional Intelligence 23 Role Conflict, Ambiguity and Work Overload 26 Perceived Empowerment Perceived Career Advancement 27 Perceived Leader -staff Relationship 28 Variables of Study 29 Relationship between Self-esteem and Propensity to Leave, Job Satisfaction and Organizational Commitment 30 Relationship between Emotional Intelligence with Propensity to Leave, Job Satisfaction and Organizational Commitment Xli

14 Relationship between Role Ambiguity, Conflict, Work Overload with Propensity to Leave, Job Satisfaction and Organizational Commitment Relationship between Perceived Empowerment and Propensity to Leave, Job Satisfaction and Organizational Commitment 36 Relationship between Perceived Career Advancement and Propensity to Leave, Job Satisfaction and Organizational Commitment 38 Relationship between Perceived Leader-staff Relationship and Propensity to Leave, Job Satisfaction and Organizational Commitment 41 Relationship between Job Satisfaction and Organizational Commitment and Propensity to Leave 47 Relationship between Job Satisfaction and Propensity to Leave 48 Relationship between Organizational Commitment and Propensity to Leave 52 Previous Research on Staff Turnover 54 Theories and Models 56 Expectancy-Valence Theory 56 Maslow Needs Hierarchy Theory 56 Douglas McGregor 59 Two Factors Theory 60 Price's Model of Turnover 61 Expectancy Model 62 Behavioral Plasticity Theory 66 The Mobley Intermediate Linkages Model 66 Prat and Bennett's Turnover Model 68 The Demographic Theory 70 Summary 71 III METHODOLOGY 72 Introduction 72 Locality of the Study 72 Research Design 73 Population and Sampling Procedures 77 Instrument and its Analysis 81 Measure of Study Variables 92 Individual Characteristics 92 Self-esteem Xlll

15 Emotional Intelligence 93 Job Characteristics 95 Role Conflict, Role ambiguity and Work Overload 95 Organizational Characteristics 98 Perceived Empowerment 99 Perceived Career Advancement 99 Perceived Leader -staff Relationship 100 Job Satisfaction ' 100 Organizational Commitment 103 Propensity to Leave 105 Pre-Test 105 Validity and Reliability of Instrument 106 Analysis of Data 108 Summary 109 IV FINDINGS AND DISCUSSION 110 Introduction 110 Profile of Respondents 110 Level of Propensity to Leave 113 Level of Job Satisfaction 114 Level of Organizational Commitrr:. nt 114 Level of Self-esteem 115 Level of Emotional Intelligence 116 Level of Role Ambiguity 116 Level of Role Conflict 117 Level of Work Overload 118 Level of Perceived Career Advancement 118 Level of Perceived Empowerment 119 Level of Perceived Leader-Staff Relationship 120 Relationship between Individual Characteristics and Propensity to Leave 121 Relationship between Individual Characteristics and Job Satisfaction 121 Relationship between Individual Characteristics and Organizational Commitment 122 Testing of Hypotheses 122 Relationship between Job Characteristics and Propensity to Leave 123 Relationship between Job Characteristics and Job Satisfaction 124 Relationship between Job Characteristics and Organizational Commitment 124 xiv

16 Testing of Hypotheses 125 Relationship between Organizational Characteristics and Propensity to Leave 126 Relationship between Organizational Characteristics and Job Satisfaction 127 Relationship between Organizational Characteristics and Organizational Commitment 128 Testing of Hypotheses 129 Relationship between Job Satisfaction, Organizational Commitment and Propensity to Leave 130 Testing of Hypotheses 130 To Examine Job Satisfaction and Organizational Commitment that Mediate the Effect of Individual, Job and Organizational Characteristics on Propensity to Leave 131 Evaluate the Overall Fit of the Structural Model 131 To Interpret the Coefficients in the Paths of Individual Characteristics 134 Observing the Direct and Indirect Path of Individual Characteristics and Propensity to Leave via Job SatisfaGtion 135 Observing the Direct and Indirect Path of Individual Characteristics and Propensity to Leave via Organizational Commitment 137 Testing of Hypotheses 138 To Interpret the Coefficients in the Paths of Job Characteristics 140 Observing the Direct and Indirect Path of Job Characteristics and Propensity to Leave via Job Satisfaction 141 Observing the Direct and Indirect Path of Job Characteristics and Propensity to Leave via Organizational Commitment 143 Testing of Hypotheses 145 To Interpret the Coefficients in the Paths of Organizational Characteristics 147 Observing the Direct and Indirect Path of Organizational Characteristics and Propensity to Leave via Job Satisfaction 148 Observing the Direct and Indirect Path of Organizational Characteristics and Propensity to Leave via Organizational Commitment 151 xv

17 Testing of Hypotheses 153 Discussion 154 Profile of Respondents 154 The Relationship between Research Variables 156 Relationship between Individual Characteristics, Job Satisfaction, Organizational Commitment and Propensity to Leave 157 Relationship between Job Characteristics, Job Satisfaction, Organizational Commitment and Propensity to Leave 162 Relationship between Organizational Characteristics, Job Satisfaction, Organizational Commitment and Propensity to Leave 166 Relationship between Job Satisfaction, Organizational Commitment and Propensity to Leave 175 Summary 181 V SUMMARY, CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS 182 Summary 182 Conclusions 186 Implications 187 Theoretical Implications 187 Practical Implications 188 Design Implications 190 Recommendations 193 Recommendations for Personnel Policy and Management 193 Recommendations for Future Research 200 BmLIOGRAPHY 201 APPENDICES 220 BIODA TA OF THE AUTHOR 228 xvi

18 LIST OF TABLES Table Page 1 The cost for replacing a manager 4 2 GDP growth by sector 5 3 Percentage distribution of employed persons by Industry and year, Malaysia 6 4 Percentage of overall staff turnover of hotels, resorts and chalets in Malaysia by years 8 5 Number of hotels in Kuala Lumpur of September, Reliability coefficient of variables at pre-test & final stage Percentage distribution of respondents by demographic characteristics Distribution of respondents by level of propensity to leave Distribution of respondents by level of job satisfaction Distribution of respondents by level of organizational commitment Distribution of respondents by level of self-esteem Distribution of respondents by level of emotional intelligence Distribution of respondents by level of role ambiguity Distribution of respondents by level of role conflict Distribution of respondents by level of work overload Distribution of respondents by level of perceived career advancement Distribution of respondents by level of perceived empowerment Distribution of respondents by level of perceived Leader -staff relationship Relationship of self-esteem and emotional intelligence with propensity to leave Relationship of self-esteem and emotional intelligence with job satisfaction Relationship of self-esteem and emotional intelligence with organizational commitment Relationship of role conflict, role ambiguity, work overload with propensity to leave 124 Relationship of role conflict, role ambiguity, work overload with job satisfaction Relationship of role conflict, role ambiguity, work overload with organizational commitment xvii

19 25 Relationship of organizational characteristics with propensity to leave Relationship of organizational characteristics with job satisfaction Relationship of organizational characteristics with organizational commitment Relationship of job satisfaction and organizational commitment with propensity to leave Summary of models in individual characteristics Summary of models in job characteristics Summary of models in organizational characteristics Standardized regression weights for paths of individual characteristics Standardized regression weights for paths of job characteristics 140 Standardized regression weights for paths of organizational characteristics xviii

20 LIST OF FIGURES Figures Page 1 Adapted from Price's model of turnover determinants and intervening variables 62 2 Adapted from E.E. Lawler's expectancy model of Motivation and behavior 64 3 Adapted from Mobley's intermediate linkages model 67 4 Prat and Bennett's turnover model 68 5 Research framework 74 6 Proposed model showing job satisfaction and organizational commitment as mediators between individual characteristics and propensity to leave Direct and indirect paths of self-esteem on propensity to leave via job satisfaction Direct and indirect paths of emotional intelligence on propensity to leave via job satisfaction Direct and indirect paths of self-esteem on propensity to leave via organizational commitment Direct and indirect paths of emotional intelligence on propensity to leave via organizational commitment Revised model showing job satisfaction and organizational commitment as mediators between individual characteristics and propensity to leave Proposed model showing job satisfaction and organizational commitment as mediators between job characteristics and propensity to leave Direct and indirect paths of role ambiguity on propensity to leave via job satisfaction Direct and indirect paths of role conflict on propensity to leave via job satisfaction Direct and indirect paths of work overload on propensity to leave via job satisfaction Direct and indirect paths of role ambiguity on propensity to leave via organizational commitment Direct and indirect paths of role conflict on propensity to leave via organizational commitment Direct and indirect paths of work overload on propensity to leave via organizational commitment 145 Revised model showing job satisfaction and organizational commitment as mediators between job characteristics and propensity to leave xix

21 20 Proposed model showing job satisfaction and organizational commitment as mediators between organizational characteristics and propensity to leave Direct and indirect paths of perceived career advancement on propensity to leave via job satisfaction Direct and indirect paths of perceived empowerment on propensity to leave via job satisfaction Direct and indirect paths of perceived leader-staff relationship on propensity to leave via job satisfaction Direct and indirect paths of perceived career advancement on propensity to leave via organizational commitment Direct and indirect paths of perceived empowerment on propensity to leave via organizational commitment Direct and indirect paths of perceived leader-staff relationship on propensity to leave via organizational commitment Revised model showing job satisfaction and organizational commitment as mediators between organizational characteristics and propensity to leave The revised model of study on relationships Model showing job satisfaction and organizational commitment as mediators between individual, job and organizational characteristics and propensity to leave 180 xx

22 CHAPTER I INTRODUCTION In the era of this new millenium, many words like mergmg, outsourcing, downsizing, retrenchment and lay-off have suddenly become so common and rather familiar. These in fact are some of the strategies that companies begin to look into, to cut cost in time of today's economic slow down. Surprisingly, even in this sluggish state of economy where retrenchment, lay-off and the likes are often the case, yet, voluntary turnover among staff, still exist and severely disturb and create quite a challenge to the human resource department of many companies (Iverson and Pullman, 2000). The problem of staff turnover facing by most companies mainly affects the skilled and the semi-skilled (white-collared). According to Font (2000), the world is facing a thin talent pool of work force. This is due to the trend of the baby boomers. The baby boomers are reaching their retirement stage and there is no other stage of baby boom there after. Hence, the labor force is beginning to shrink as the years proceed. Thin talent pool of workforce could cause job-hopping (Font, 2000). However, factors that trigger the staff turnover are the behavior and attitude of the staff themselves (Fishbeine and Ajzen, 1975). According to Bluedorn (1982) and

23 2 Hom and Griffeth (1991) the study of staff turnover could not be explained by the behavior and attitude of the employee alone. In their study, individual characteristics need to be studied together with the job characteristics and organizational characteristics. In the earlier studies (before 1980' s) most researchers include job satisfaction as the mediators in influencing staff turnover. In the contemporary studies, organizational commitment is also regarded as an important mediator (Hom & Griffeth, 1995). In this case, researcher is examining the significant path of relationship between individual, job and organizational characteristics and propensity to leave with the job satisfaction and organizational commitment as the mediators. Background of Study Staff turnover is a serious problem of employers nowadays. According to a strategic analysis of employment and training needs by Centre for recruiting and training (CERT), the Tourism and Training agency, approximately 125,000 new recruits will be needed in the Tourism and Hospitality industry over the next five years. The CERT forecasts survey finds that an additional 100,000 vacancies will arise as a direct consequence of continuing labour turnover within individual businesses over the period (O'Halloran, 2000). The survey by the Center for Organizational Research (COR) had found that 64% of the company taken into study had an annual staff turnover rate between

24 3 15% - 50%. Only a sizable minority (27%) continues to enjoy rates below 10% and the average rate is 23% (Havard Management, 2001). In the hospitality industry such as restaurants and hotels, high rate of staff turnover has been reported by many researchers since the last three decades (Azlinzuraini, 2001). The forecasts survey conducted by CERT also show the seriousness of staff turnover. According to the forecasts, the number of new recruits required by sectors will peak in Hotels and restaurants alone will require just over 11,000 new employees as a consequence of high staff turnover (O'Halloran, 2000). According to Maddern (2000), 20% turnover rate has become the norm in the technology world. Some studies place the figure as high as 25%, a major increase from the traditional rate of 6%. In addition, the time involved in replacing a lost employee and getting a new employee as productive, usually averages around nine months or more (Maddern, 2000). The Harvard Management (2001) has gathered a cost-benefit analysis of turnover from The Human Resource Consulting Firm Development Dimensions International (Pittsburgh). By using the result of this analysis, the cost of losing and replacing an employee could be roughly estimated but the cost may vary

25 4 widely as it depends on the individual and industry involved. Table 1 below shows the average cost of replacing a manager, which is very close to $108,000. Table 1: The cost for replacing a manager Particulars Advertising Serverance Candidate Travel Costs Interview Costs Adminitrative Costs to process all candidates Total Cost per hire Relocation costs Lost opportunities/hidden Costs Training Cost $ 6,000 $4,000 $1,250 $ 720 $ 400 $107,970 $50,000 $30,000 $15,600 Source: The Harvard Management, 2001, p.1 Based on the cost benefit analysis, staff turnover does affect the companies rather seriously. Naturally this problem also indirectly affect the country's economy. It seems more so especially in the service sector since this sector is said to be a vital source of country's economy besides manufacturing. As can be seen from the Malaysian Economic Report in Table 2, service sector has injected 4.8% into the country's economy in the year 2000 and are said to be the second highest after manufacturing sector (Malaysian Economic Planning Unit, 2002).